Creating Green Revenue & New Opportunities for banks

The transition to a low-emission society depends on the financial sector.

How banks lend, invest, and advise their customers largely determines which businesses and projects gain access to capital. Correct risk pricing has always been one of the financial sector's core tasks and an important part of its societal mission. Banks should distribute risk and ensure that capital is channeled into projects with the highest risk-adjusted return.

For banks to contribute to significant reductions in greenhouse gas emissions, access to relevant data is crucial.

Calculating financed greenhouse gas emissions can help financial institutions comply with current or upcoming regulatory requirements and be used in risk assessments and other internal processes, such as setting emission reduction targets.

The Partnership for Carbon Accounting Financials (PCAF) is the authoritative standard for calculating financed greenhouse gas emissions. With over 370 financial institutions as members and more than 88 trillion USD in assets, PCAF standardizes the calculation and reporting of financed greenhouse gas emissions based on the Greenhouse Gas Protocol (GHG Protocol).

Banks face several business needs:

• Regulatory requirements: Increased pressure to measure, report, and manage greenhouse gas emissions.
• External communication: Investors, credit rating agencies, and customers demand more detailed information on carbon footprints.
• Decarbonization: Reliable data on financed emissions and insights into their development over time.
• Business development: Emission data as a basis for developing relevant products and services.
• Risk: Better quality calculations reduce risk.

With our method for automating and systematizing climate reporting, we deliver important business benefits for our customers:        

• Accurate reporting: More accurate data that reduces investor risk and differentiates the banks' climate reporting.
• Increased opportunities for products and services: New products and services based on customers' actual emissions. Customers with lower emissions can receive better terms, and customers needing transition can get tailored advice.
• Improved risk management: Better risk management and potential rewards in future capital requirements. Reduced loan losses due to stranded assets and failed transitions.

SpareBank 1 Nord-Norge says:

"The quality of sustainability data can be significantly increased at both portfolio and customer levels. With Energi.ai, we have now obtained results that clearly illustrate the value of basing emission calculations on customers' climate accounts, compared to industry estimates, to be able to conduct, for example, advisory services, pricing, and risk modeling at the company level."

We are proud to help financial institutions navigate the complex path towards lower greenhouse gas emissions while simultaneously creating business value for our customers in the banking sector.

I would be happy to discuss this further with you. Contact me at [email protected] to set up a meeting.

SpareBank 1 Nord-Norge Partnership for Carbon Accounting Financials (PCAF) 安永 Finans Norge

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References:

1. Partnership for Carbon Accounting Financials (PCAF)
2. Greenhouse Gas Protocol